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Proceedings of the International Association for Business and Society

Volume 28, 2017

Proceedings of the Twenty-Eighth Annual Meeting

Daina Mazutis, Anna Eckardt
Pages 182-190

Getting boards on board
Investigating the corporate sustainability imperative and implementation gap

Strategic leadership and corporate governance scholars have long been interested in the relationship between a company’s board of directors and firm performance – primarily financial, and increasingly social and environmental performance as well. To date, research on the board-performance link, especially in the domain of ethics, responsibility or sustainability (ERS), has concentrated almost exclusively on board structural, demographic or ownership factors arguing from an agency theory perspective that increased board independence will result in more effective CEO and TMT monitoring as well as better strategic guidance. And yet, many reputable corporations with exemplary corporate governance structures continue to make questionable strategic decisions (e.g. Volkswagen emission scandal; Exxon climate change denial). As such, this research seeks to go beyond descriptive corporate governance approaches to understand exactly how boards of directors are dealing with ERS issues from a strategic decision-making perspective. We present a theoretical model that we aim to explore through qualitative interviews with board members thereby contributing to the corporate governance and sustainability literatures by elucidating on the mechanisms by which board decision-making processes affect firm performance.

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